[Tanada]

Rockman I am not sure how to interpret that reply, are you saying I am correct as long as prices stay up or that I am wrong and it is all an artifact of high prices?

[ROCKMAN]

T - I wasn't so much talking about prices as the difference in the shale plays from the PB plays. Again, a generality, but the drilling in the PB is more in the order of EOR then exploration. High oil prices are creating new hz and vertical wells in some very old fields. And not so much super straws but just nice wells. In fact a lot of the new production in the PB is coming from rather shallow vertical wells that are being poked between 40+ year old wells. They might only make 20 or so bopd but there's the potential to drill thousands of them. A rather straight forward economic calculation. The shales OTOH have much more uncertainty in their economic potential.

I'm not sure what you mean by artifact. Nearly all the oil wells drilled today are the result of high prices. So yes: IMHO you're correct.

[Tanada]

T - I wasn't so much talking about prices as the difference in the shale plays from the PB plays. Again, a generality, but the drilling in the PB is more in the order of EOR then exploration. High oil prices are creating new hz and vertical wells in some very old fields. And not so much super straws but just nice wells. In fact a lot of the new production in the PB is coming from rather shallow vertical wells that are being poked between 40+ year old wells. They might only make 20 or so bopd but there's the potential to drill thousands of them. A rather straight forward economic calculation. The shales OTOH have much more uncertainty in their economic potential.

I'm not sure what you mean by artifact. Nearly all the oil wells drilled today are the result of high prices. So yes: IMHO you're correct.

Rockman this is intended as a compliment. You should moonlight as a Lawyer

I get what you are saying about the PB (Permian Basin I think), so thousands of shallow wells is definitely not a superstraw. I was trying to compare the frack and drain boom to the situation that took place in the Yibal field in Oman as described by Mat Simmons in his book Twilight In The Desert. When I read these news reports and stats from North Dakota's fracking boom the drill/frack/drain pattern closely resembles the horizontal multicompletion superstraw draining of Yibal in Oman that took place 15 years ago.


Like this,

[ROCKMAN]

T - Thanks...I wasn't familiar with Yibal Field. But I won't let ignorance stop me. Looking at the chart I'm going to guess it was a strong bottom water drive. Thus the existing vertical wells eventually began producing a low oil cut and with limited production rates netted very little oil. Maybe something like a 500 bbl/day per well with a 5% oil cut = 25 bopd. But now put a hz well into the reservoir capable of producing 10,000 bbls per day with a 5% oil cut nets 500 bopd.

So yes: the vertical wells might have eventually produced the same amount of oil. But the superstraws might now ultimately produce about the same amount but will get it out faster. So the same with many of the PB wells: they are recovering reserves that would have been produced anyway but over a much longer time. Which is different then the Eagle Ford/Bakken plays: if those wells aren't drilled that oil will never be produced.

[Tanada]

Yup, it was a conventional field with water injected drive to keep the oil flowing. In the early 1990's they reworked it with multicompletion horizontal drilling and production soared from 1993-1997. They thought their golden goose was assured so they spent boucoup bucks upgrading the above ground facilities in the early 00's only to have production collapse like a ton of bricks. In the end they moved the oil production forward but did not produce any extra oil over original estimates.

Just teasing but Eagle Ford or not, if nobody ever drilled a field none of them would produce oil. I know you mean PB was already producing just at a slower rate and like Yibal it would have eventually given up its oil some time into the future.

[copious.abundance]

3.2 million bpd for two months in a row now


Some nice reading

[copious.abundance]

Posted Mon Jun 30, 2014, on pg. 2. Just thought I'd bump it up for the entertainment value.

westexas continues to enlighten us all as to WHY oil prices have not dropped. The markets are telling you all you need to know. The global oil market is screaming Peak despite the cornies hand waving to some obviously flawed total liquids number.

It would behoove the cornies to at least attempt to try to understand his analysis. Personally I believe this is the way to look at the greater picture. This is where we will first see (and ARE SEEING) the cracks in the damn.

How much longer can non crude/tight oil numbers grow and what is the REAL makeup of those numbers. Thanks to Jeffrey for his tenacity and continued work on this, its MUCH appreciated here.

[AirlinePilot]

Ask yourself what has changed in the last year to validate or even explain the recent price moves. I find it difficult at best to say its all fundamentals.

Prices will be coming back, the industry NEEDS them. I dont think we will have to wait very long either.

[shallow sand]

It is stunning how TX prod increased from 2010-2014. If price stays at 2009 levels will be interesting to see what happens to production.

[ROCKMAN]

AP - "Ask yourself what has changed in the last year to validate or even explain the recent price moves". US companies have had to drop the price of motor fuels 23% just since last April in order to get enough consumer consumption to generate enough cash flow for their operations. The current crack spread (what they buy oil for vs what they sell products for) is between $10 -$15 per bbl. Which means if they were paying $90/bbl for oil today they would be losing $10+ for every bbl they bought. How much oil would be sold to US refiners today if they were going to lose money on every bbl. I would say that's a rather fundamental dynamic.

[toolpush]

Yup, it was a conventional field with water injected drive to keep the oil flowing. In the early 1990's they reworked it with multicompletion horizontal drilling and production soared from 1993-1997. They thought their golden goose was assured so they spent boucoup bucks upgrading the above ground facilities in the early 00's only to have production collapse like a ton of bricks. In the end they moved the oil production forward but did not produce any extra oil over original estimates.

Just teasing but Eagle Ford or not, if nobody ever drilled a field none of them would produce oil. I know you mean PB was already producing just at a slower rate and like Yibal it would have eventually given up its oil some time into the future.

Just a little story I picked up from a DD who worked on the Yidel project. Everybody was on bonuses for drilling rate, Co-man, DD, drill crew etc. Apparently the first few meters of the reservoir was made up of a hard slow drilling rock, which wasn't a real problem in the vertical wells, but for the horizontal wells it would have been a long hard drilling program. Below the hard stuff, was some softer, more easily drilled sand. As I said before everyone was on bonus so many people were prepared to a blind eye to drill a fast well, rather than what would have been more beneficial to longer life of the well.
Everyone in the drilling project was long gone before the production took its last fatal decline.

[DesuMaiden]

Texas oil production already peaked in the 1970s. There is no way in hell they can produce 3 million barrels of oil again ever.

[copious.abundance]

Texas oil production already peaked in the 1970s. There is no way in hell they can produce 3 million barrels of oil again ever.

Ummmm ... you might want to look at the chart above. They've already surpassed 3 million barrels a day.

[copious.abundance]

Their 70's peak was just shy of 3.5 million bpd in the early 70's. At 3.2 million now they're almost there.


LINK

Now, there are those who say that more of the production these days is in the form of condensate - it's about 15% of the c&c production these days, whereas back in the early 70's it was much smaller. So, to equal the "crude" portion of c&c production from the early 70's it would have to get to about 4 million bpd (3.5 million + 15%). Even that level isn't all that far off - Texas has added about 800K bpd in the the last 18 months.

[copious.abundance]

3.3 million bpd for two months in a row now

[Pops]

3.3 million bpd for two months in a row now

So no longer growing eh?

[vtsnowedin]

So if the world oil "Glut" amounts to 1.1 million barrels per day the Texas producers could shut in about half of their wells for three or four months to make the surplus dry up then go back to selling oil for $85 plus. It would seem like a good investment.

[copious.abundance]

3.3 million bpd for two months in a row now

So no longer growing eh?

Actually, it did grow - from 3.309 million bpd in September to 3.357 million bpd in October, which is a very typical 1-month increase in the recent upward trend.

[Tanada]

3.3 million bpd for two months in a row now

So no longer growing eh?

Actually, it did grow - from 3.309 million bpd in September to 3.357 million bpd in October, which is a very typical 1-month increase in the recent upward trend.

Just out of curiosity what output do you think Texas second peak will reach?

[copious.abundance]

^
I don't have the slightest idea. And neither does anyone else.